Market Commentary - End-Session
Nifty snaps 14-day streak on weak global cues As on : 04-Sep-24  18:04

The domestic equity benchmarks ended with minor losses on Wednesday. The Nifty snapped its 14-day winning streak and settled a tad below the 25,200 level. Global market jitters over a potential US economic slowdown and anticipation of key economic data weighed on sentiment. Despite early losses, selective buying in large-cap stocks helped limit the decline. Healthcare and pharma sectors outperformed, while IT and PSU banks faced selling pressure.

The S&P BSE Sensex slipped 202.80 points or 0.25% to 82,352.64. The Nifty 50 index declined 81.15 points or 0.32% to 25,198.70. The 50-unit index had risen 4.73% in the past 14 consecutive sessions.

In the broader market, the S&P BSE Mid-Cap index fell 0.15% and the S&P BSE Small-Cap index rose 0.26%.

The market breadth was negative. On the BSE, 1932 shares rose and 2019 shares fell. A total of 96 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rallied 3.86% to 14.38.

Economy:

The HSBC India Services PMI was revised to a five-month high of 60.9 in August 2024 from 60.4 in the preliminary estimates, as the growth of incoming new business ticked higher. The latest result rose from 60.3 in July, marking the 38th consecutive month of growth in services activity, boosted by productivity gains and positive demand trends.

The HSBC India Composite PMI was at 60.7 in August 2024, compared with a flash figure of 60.5. The latest result matched July's reading, remaining comfortably above its long-run average of 54.6. It was the 37th month of rise in private sector activity, with service providers signaling the strongest rise in business activity since March while goods producers posted the weakest expansion in production for seven months.

Numbers to Track:

The yield on India's 10-year benchmark federal paper advanced 1.56% to 6.977 as compared with previous close 6.984.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 84.0150, compared with its close of 83.9800 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement shed 0.10% to Rs 71,310.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.16% to 101.66.

The United States 10-year bond yield decline 0.58% to 3.819.

In the commodities market, Brent crude for November 2024 settlement added 29 cents or 0.29% to $74.04 a barrel.

Global Markets:

Markets in Europe and Asia declined on Wednesday, following a sharp tech selloff on Wall Street, coupled with resurgent concerns about U.S. growth, drove investors away from riskier assets.

Recent data from China revealed that its economy is still struggling to gain traction, leading to renewed calls for more stimulus from Beijing. The sluggish Chinese outlook, the world's largest oil importer, further exacerbated the decline in oil prices due to expectations of weakening demand.

September has historically been a challenging month for stocks, but analysts attributed the current rout to a confluence of factors, including tepid U.S. manufacturing data.

U.S. stocks closed sharply lower overnight after the holiday, with AI leader NVIDIA tumbling nearly 10% as investors tempered their enthusiasm about artificial intelligence. The return from the Labor Day holiday saw a widespread air of portfolio de-risking across capital markets. Growth concerns were the dominant theme, leading to a sell-off in cyclical-sensitive assets and aggressive hedging.

The Dow Jones Industrial Average fell 1.51%, the S&P 500 slid 2.12% and the Nasdaq Composite dropped 3.26%. All three indexes notched their worst days since the global sell-off on Aug. 5.

US manufacturing contracted at a moderate pace in August. The Institute for Supply Management (ISM) said its manufacturing PMI rose to 47.2 last month from 46.8 in July, which was the lowest reading since November. The PMI remained below the 50 threshold for the fifth straight month.

Stocks in Spotlight:

General Insurance Corporation of India tumbled 5.59% to end at Rs 397.70 after the President of India announced its proposal to sell upto 6.78% stake in the company through an offer for sale (OFS) on 04th and 05th September 2024. On Day 1 (T-day), as of 15:30 IST, the OFS received subscription for 5,81,05,684 shares. It was subscribed 108.49% on the base non-retail offer size of 5,35,60,800 shares.

Azad Engineering jumped 4.37% to Rs 1,573 after a foreign broker initiated its coverage on the stock with a 'buy' rating and a target price of Rs 1,850 per share.

Cellecor Gadgets spurted 9.93% to Rs 3.75 after the company announced the launch of its latest range of laptops and smartphones in September for the upcoming festive season.

Natco Pharma added 1.66%. The pharma major said that its wholly owned Canadian subsidiary, Natco Pharma (Canada) made an investment of $8 million in biotechnology company, eGenesis for developing safe and effective human-compatible organs for transplant.

Shilpa Medicare (SML) climbed 6.38% after the company announced that it has submitted new drug application (NDA) to U.S. Food and Drug Administration (USFDA) for Oxylanthanum Carbonate.

Rama Steel Tubes soared 12.17% after the company announced a strategic collaboration with Onix Renewable for provide steel structures for latter's solar projects.

Indian Energy Exchange (IEX) rose 0.39%. The company informed that it has achieved electricity volume (including certificates) of 12,040 million units (MU) in August 2024, registering a growth of 35.8 % YoY basis.

MOIL rose 0.58%. The company achieved its best ever August production of 1.24 lakh tonnes of manganese ore in August, 2024.

Cupid added 0.91%. The company is embarking a dynamic B2C expansion strategy with a topline target in excess of Rs 50 crore in this financial year.

New Listing:

Shares of ECOS (India) Mobility & Hospitality closed at Rs 441.05 on the BSE, representing a premium of 32.05% as compared with the issue price of Rs 334.

The scrip was listed at Rs 391.30, exhibiting a premium of 17.15% to the issue price.

The stock has hit a high of 456 and a low of 380.10. On the BSE, over 22.82 lakh shares of the company were traded in the counter.

IPO Update:

The initial public offer (IPO) of Gala Precision Engineering received 44,79,36,580 bids for shares as against 22,23,830 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (4 September 2024). The issue was subscribed 201.43 times.

The issue opened for bidding on Monday (2 September 2024) and it will close on Wednesday (4 September 2024). The price band of the IPO is fixed between Rs 503 to Rs 529 per share. An investor can bid for a minimum of 28 equity shares and in multiples thereof.

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